Cameron has announced plans to roll back green charges on energy bills. These charges fund the only measures likely to lower bills in the future.
“From Rambo to Bambi in four years”, was Labour leader Ed Miliband’s take on David Cameron’s stance on the big six energy companies this week. And the withering assessment could equally be extended to cover the prime minister’s attitude towards meeting the UK’s sustainable energy targets through a greener built environment.
Cameron’s surprise announcement last week that he wants to “roll back” green charges on consumers’ energy bills, in an effort to combat the 10% price hikes announced by major energy providers, has put paid to any lingering claims of his being the “greenest government ever”.
It’s clear the government is under pressure to act to combat the effect of the dramatic price rises in fuel bills announced over the last few weeks. But to axe the green charges - which fund a string of retrofit and renewable energy programmes - with apparently no mechanism to replace this lost income, would be a shamefully short-sighted position.
Cameron’s actions this week have indicated that sustainability considerations are often an afterthought for this government
This is partly because the retrofit measures funded by these charges - including the Energy Company Obligation scheme - are currently the only measures that show any possibility of lowering energy consumption enough to reduce household fuel bills in future. From an industry perspective, crucially, these initiatives are also the biggest argument for investing in the retrofit capability and sustainable technologies that will reduce the carbon emissions that come from the existing housing stock.
Liberal Democrat leader Nick Clegg, who has condemned the notion of cutting energy-saving programmes, has suggested that if Cameron went ahead with the move there may be a possibility of moving the charges into general taxation. That could feasibly provide a solution, but one of the most damnable aspects of Cameron’s announcement is that he has placed the government in a situation where politically, it is now likely to confirm cuts before a plan can be put in place to make up the shortfall in retrofit financing - assuming that the will to do so is even there.
As a result, the industry is likely, at best, to experience a hiatus in work if Cameron’s plans go ahead, which on top of existing delays to the Green Deal will make it harder for companies to justify decisions to increase green construction capacity.The most likely candidate for the axe, because it accounts for the largest spend of the green charges, is the ECO. But this is also the most reliable retrofit programme running, providing £1.3bn of work annually for contractors. To this end, Building this week joined the UK Green Building Council and a host of senior industry figures in writing to Cameron urging him to continue the scheme, as part of our Green for Growth campaign.
With just over a month to go until the Autumn Statement, the likely forum for the government to announce its decisions, the sector has only a short window to make its voice heard. But perhaps the most damaging sign in all of this is that it still has to do this at all. Cameron’s actions this week have, whatever the outcome of the review, indicated that sustainability considerations are often an afterthought for this government. And unless that changes, how can the government expect the industry to have confidence in any programmes of work related to sustainability, including the investment in low carbon energy generation infrastructure such as Hinkley Point C, which under current plans would be paid for by piling the cost on energy bills? The long-term feasibility of a greener, more sustainable energy supply for the UK, and the cost and environmental savings of reducing emissions, must not be jeopardised for short-term political gain.
Sarah Richardson, editor